What Changed
Budget 2026 rewrote R&D Tax Incentive rules starting July 1, 2028. Key numbers:
- Refundable offset threshold: Now $50M turnover (was $20M). Startups keep access to cash refunds longer as they scale.
- Expenditure cap: $200M (was $150M). Falls short of Tesla chair Robyn Denholm's push to remove caps entirely in the Ambitious Australia review.
- Core R&D offset rates: Up 4.5 percentage points, lifting effective rates 25-50%.
- Minimum claim: $50K (was $20K). Small claims under $50K must go through registered Research Service Providers or Cooperative Research Centres.
- Refundability limit: Firms under 10 years old only, regardless of turnover.
What It Means for Sales Hiring
Cash refunds accelerate hiring capacity for pre-revenue startups. R&D-heavy firms (AI, biotech, SaaS) typically burn 60-70% of runway on engineering, leaving limited budget for go-to-market. Faster cash through refundable offsets means earlier AE and SDR hires.
Historical pattern: Australian startups hitting $5M-$20M revenue often delay enterprise sales hires due to cash constraints. The $50M threshold extends this runway by 18-24 months for high-growth firms.
Worth noting: the refundability age cap (under 10 years) excludes later-stage scaleups. A firm founded in 2018 loses refund access in 2028 regardless of size, pushing them toward non-refundable offsets or private capital for sales expansion.
Market Context
Australia targeting 2.5% of GNI in R&D spend by 2030 (currently tracking lower than Ireland's 35% credit rate and US payroll tax offsets). The changes position ANZ to compete for R&D investment but stop short of removing expenditure caps that limit large-scale innovation.
Australian VC investment hit $5B in 2025. Expect 10-15% uptick in seed/Series A rounds for R&D-intensive startups, translating to incremental sales hiring at firms like Harrison.ai (AI healthtech, $133M raised) or emerging enterprise SaaS plays.
The budget papers confirm supporting R&D expenditure eligibility is removed, simplifying claims but potentially excluding contractor costs previously claimable.
Sales Impact
For hiring managers: budget for longer ramp if your startup qualifies. Cash refunds typically process 12-18 months post-claim, meaning Q3 2028 R&D spend surfaces as hiring budget in Q1 2030. Plan accordingly.
For sellers evaluating offers: check if the company qualifies (under $50M turnover, under 10 years old, R&D-intensive). Refund-backed hiring is more predictable than VC-dependent expansion.